Resolving a transfer price convict
Alton division (A) and Birmingham division (B) are two manufacturing divisions of Conglom plc. Both of these divisions make a single standardized product; A makes product I and B makes product J. Every unit of J requires one unit of I. The required input of I is...
Lin Fitzgerald, University of Warwick Business School Background
Fleet operates a chain of high street retail outlets selling clothing and household items. In 1995 this company was heading for a financial loss and was deemed to have lost strategic direction. The business fo...
The Oslo division and the Bergen division are divisions within the Baltic Group. One of the products manufactured by the Oslo division is an intermediate product for which there is no external market. This intermediate
product is transferred to the Bergen division where it is converted int...
Discussion of various divisional performance measures
You are the highly trusted chief accountant of Ragwort Ltd, a manufacturer of sports equipment, and you have strong private hopes of joining the board in the next year or two in a newly created post of finance director.
Variance analysis and reconciliation of budgeted and actual profit.
Bronte Ltd manufactures a single product, a laminated kitchen unit with a standard cost of Â£75 made up as follows:
Direct materials (15 ...
Standard hours for producing two products A and B are 15 hours and 20 hours per unit, respectively. Both products require an identical type of labour and the standard wage rate is Rs. 5 per hour. In a year, 10,000 units of A and 15,000 units of B were produced. The total labour hours actua...
For manufacturing a certain quantity of product X, the standard and actual figures in respect of materials are as follows:
Less = Loss
A company uses Standard Costing System. The sales data for a period are as follows:
Budgeted Sales (units)
Budgeted Selling Price per unit (Rs.)
Annual Sales (units)
Actual Sales Value (Rs.)
New techniques are often described as contributing to cost reduction, but when cost reduction is necessary it is not obvious that such new approaches are used in preference to more established approaches. Three examples are: